The Pandora Papers detail the findings of a leak of confidential records of 14 offshore service providers. The damning exposé underlines the secret deals and hidden assets of some of the world’s richest and most powerful people. The Papers unmask how these offshore services providers offer professional services to wealthy individuals and corporations. The staggering extent of these services includes incorporating shell companies, trusts, foundations, and other entities in low- or no-tax jurisdictions.

Unprecedented global journalistic collaboration

The Pandora Papers investigation is, to this day, the world’s largest-ever journalistic collaboration that took almost two years to complete. A total of 2.94 terabytes of data and 11.9m files were leaked to the International Consortium of Investigative Journalists (ICIJ) in Washington. The leaked documents include emails, memos, incorporation records, share certificates, compliance reports, and complex diagrams that represent labyrinthine corporate structures. The documents also name some of the true owners of previously invisible shell companies for the first time.

A massive global investigation followed the leak as the ICIJ shared access to the leaked data with select media partners. Over 600 journalists from 150 media outlets in 117 countries analysed the leaked data. The shocking revelations have rocked the global financial and political elite as the Papers describe the inner workings of the previously unknown financial universe. The service providing entities enable owners to obscure their identities from the public and, quite often, from regulators.

Secrecy, not legality, is the question

While setting up or benefiting from offshore companies is not itself illegal, the big question is that if the rich and powerful have nothing to hide – as the response a handful of the exposed individuals have chosen to adopt – then why choose to keep one’s wealth offshore that reeks on often nefarious intentions? In some cases, people may really have legitimate reasons, such as data protection and security for choosing anonymity and secrecy. However, the secrecy these tax havens ensure also attracts tax evaders, fraudsters, and money launderers. The Pandora Papers expose them too and for the global financial and political elite, it does not paint a good picture to be in that good company.

Shadow financial world

The latest episode in the financial leaks storm is easily the biggest trove of leaked offshore data in history. Pandora’s files cache unmasks a shadow financial world where wealthy clients hire service providing forms to establish offshore structures and trusts in notorious tax havens, such as Panama, Dubai, Monaco, Switzerland, and the Cayman Islands.

The offshore affairs of 35 world leaders, prime ministers, and heads of state, over 300 other public officials such as government ministers, judges, mayors, and military generals in more than 90 countries. Over 100 billionaires also feature in the leaked data along with celebrities, rock stars, and business tycoons. Almost all of these individuals were found to have used shell companies to hold and buy luxury items and maintain disguised bank accounts.

Who is named in Pandora Papers?

Pandora is a mere sneak peek into the covert inner working a parallel global offshore economy where some of the world’s richest people and wealthy companies stash their assets to avoid paying tax elsewhere. Although it remains a legal activity, it is estimated that the offshore economy cost governments billions in lost revenues around the globe.

As the media outlets continue to publish their findings, the main focus has been on the offshore financial affairs of some of the most powerful political leaders in the world. And its revelations include some big names with some of them sitting at the helm of crumbling economies as they decry corruption, tax evasion, and financial secrecy. The irony, in most of these revelations, is unmistakable for one reason or another.

Putin’s inner circle & anti-oligarchy president’s misstep

Despite the US allegations that the Russian president Vladimir Putin holds a secret fortune, his name does not appear in the leaks. However, the investigation extensively names Putin’s inner circle, including his best Childhood friend and a woman the Russian president was allegedly once romantically involved with. Across the border, Ukraine’s anti-oligarchy and anti-corruption President Volodymyr Zelenskiy is also said to have transferred his 25% stake in an offshore company to a close friend. That friend now works as the president’s top adviser.

In the Middle East, Jordan’s ruler King Abdullah II is said to have amassed a secret $100m property empire spanning Malibu, Washington, and London. The king maintains that nothing is improper about owning properties via offshore companies but the country blocked the ICIJ website, hours before the Pandora papers launched.

Elsewhere, Azerbaijan’s ruling Aliyev family has dealt about $543m of UK property in recent years. A couple of serving European Union leaders are also under fire. Czech Republic’s Prime Minister Andrej Babiš is facing claims that he used an offshore investment company to acquire a $22m chateau in southern France. What is worse is that he is up for election this week. Over in Cyprus – a controversial offshore destination itself – President Nicos Anastasiades is under pressure to explain why a law firm he founded was facing accusations of hiding the assets of a controversial Russian billionaire behind fake company owners.

Spotlight on former UK Prime Minister

Former UK Prime Minister Tony Blair and her Cherie Blair are also named in the leaks. They have not been accused of wrongdoing; however, the investigations revealed that the couple saved about $423,352 in property taxes. The property in question is a London building partially owned by the family of a prominent Bahraini minister that the former prime minister bought. The couple also bought the $8.8m office in Marylebone by purchasing a British Virgin Islands offshore company. There is no evidence that the Blairs proactively sought to avoid property taxes. Regardless, the transaction underscores a glaring loophole that enables wealthy property owners not to pay a tax, in stark contrast with the ordinary Britons.

Exposing the operation of offshore system

One of the significant aspects of the Pandora Papers is that the investigators have shed light on how the offshore system works. The probe names the US as one of the leading tax-havens. The leaks suggest the state of South Dakota is secretly harbouring billions of dollars in wealth that is linked with the individuals who have been previously accused of serious financial crimes. The scandalous revelations contradict US President Joe Biden’s grandiose promises to lead international efforts to bring transparency to the global financial system.

The probe also underlines that the offshore servicing industry along with the wealthy clients and their advisers have exhibited the capability of adjusting to new realities after the previous offshore revelations. The previous leaks instigated largely moderate reforms in some countries and the Pandora Papers suggest that the rich and powerful almost immediately adjusted their operation to the new and relatively modest regulations to circumvent the law.

$11.3tn stashed in offshore economy

A 2020 study by the Paris-based Organisation for Economic Co-operation and Development (OECD) concluded that at least $11.3tn in wealth was being held offshore.

The director of the ICIJ Gerard Ryle said, “This is money that is being lost to treasuries around the world and money that could be used to recover from Covid. We’re losing out because some people are gaining. It’s as simple as that. It’s a very simple transaction that’s going on here.”

Ryle said that it is no wonder that the leading politicians were likely to be the main hindrance when it comes to reforming the secretive offshore economy. Ryle said that the politicians would want the status quo to continue given their financial stake in the offshore tax-havens.

He said, “When you have world leaders, when you have politicians when you have public officials, all using the secrecy and all using this world, then I don’t think we’re going to see an end to it.”


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